Military contracts haul in $6.5B to Bay County since 2000

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Mar 11, 2017 at 10:00 PMMar 27, 2017 at 12:14 PM

“Some of the biggest names in defense are in our area,” said Glen McDonald, ARA's senior vice president and Gulf Coast sector manager. “Defense contracting is big here because Bay County is a military community.”

COLLIN BREAUX News Herald Reporter @PCNHCollinB

PANAMA CITY — Defense contractors’ work typically proceeds within the shadow of the military at large, but that behind-the-scenes work is quietly bringing billions of dollars to the area.

Their wide-ranging work — repairing boats and improving bomb detection at airports, for starters — has steered $6.5 billion to Bay County for over 8,500 contracts from 2000 to 2015, according to information supplied by the Veterans Business Outreach Center (VBOC) at Gulf Coast State College.

And those jobs tend to pay higher salaries and better benefits than the local average, along with sustaining dozens of local businesses and bringing in workers from out-of-town giants like Lockheed Martin. Together, the businesses focus on work that frees up the military to do its primary job: protecting the country.

Defense contractors are primarily private businesses whose main focus is contracting with the government to provide needed services. Within Bay County are 429 contractors, according to recent contract records. Of those, 13 belong to the Bay County Chamber of Commerce, where some have been members since the 1980s. Some contractors work mostly with local bases, while others also contract outside the county.

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What they have in common is making life easier on local military installations.

At Applied Research Associates (ARA) in downtown Panama City, that help comes in the form of explosives testing, printing posters, editing instructional videos and other ongoing projects for the Air Force Civil Engineer Center (AFCEC) at Tyndall Air Force Base.

"AFCEC uses a team of active-duty members, civilians and contractors to accomplish our various missions in support of the Air Force and our nation," said AFCEC public relations official Deborah Aragon. "In many instances, our contractors provide the intellectual capital to perform technical assistance, research, development, test and evaluation to meet our objectives."

Contractors greatly supplement the military because they can lend specific skills as needed, said Glen McDonald, ARA’s senior vice president and Gulf Coast sector manager. Those specific skills help fill a capability gap, providing instant knowledge that could require years of training for the military.

“It’s a great thing with (the military) being a lead and us being able to bring in people from all over,” McDonald said. “This community has some of the best technical chops and corporate talent.”

Contractors also have the benefit of being unencumbered by the usual regulations that hold back federal employees and agencies. Without those restrictions, they can reach any goal they focus on, said VBOC business consultant and Air Force veteran John Miller.

“You can give them a task and their entire focus will be on performing that task,” Miller said. “Subcontractors are even more efficient because the government passed down all sorts of requirements to the larger businesses.

“It frees up the war fighters to fight wars. You don’t want the people in uniform making stuff on assembly lines.”

Local, national experts

New Mexico-based ARA is a national research and engineering business, focusing on national security, infrastructure, health solutions, and energy and the environment.

Locally, the company employs about 200 people at its downtown Panama City office, most of whom do not work as defense contractors. Last year, for example, a local team of 12 scientists received national attention for creating a functional petroleum replacement from biofuel.

But McDonald said as a defense contractor, most of the company’s revenue comes from military clients like AFCEC. About 30 ARA employees do that contract work, which includes working on explosives testing at Tyndall in an effort to prevent airport bombings.

“We have some of the world’s best explosive chemists in Bay County,” McDonald said. “We try to get ahead of the curve so the airport can detect” the bombs.

Another of the area’s largest defense contractors is Science Applications International Corporation (SAIC), which employs about 100 people at its Thomas Drive office in Panama City Beach. Like ARA, SAIC is is an international company based in McLean, Virginia. Its presence in Bay County dates to the 1970s. SAIC handles about a dozen contracts a year, mostly with the Naval Surface Warfare Center Panama City Division (NSWC PCD).

"We do everything from hardware to fabrication to developing software to logistics support," said SAIC Vice President and Program Director Mike Plitman. "We do a lot of engineering design work. We help (the Navy) manage their programs."

Among those programs, the company expects to finish redesigning a Navy boat soon, a project they've been at since last year. Their touch-ups, which includes fixing up the wiring, will make for easier maintenance and troubleshooting if something goes wrong.

Also working with NSWC PCD is PSA, a Panama City-based, veteran-owned company with over 30 full-time local employees. PSA was founded in Bay County in 1988 and makes Configuration Management Professional (CMPRO) software that helps clients manage their engineering, inventory, configuration and product data, said PSA public relations specialist Sara Moon.

The company also does contract work for other military installations throughout the country.

Bay County’s substantial military presence also has drawn in some of the defense industry’s giants.

Major out-of-town players include Northrop Grumman, Booz Allen Hamilton and Lockheed Martin, which has 12 employees at Tyndall supporting the F-22 program through training systems, supply chain management and other means, said Lockheed Martin communications and public affairs director Kenneth Ross.

“Some of the biggest names in defense are in our area,” McDonald said. “Defense contracting is big here because Bay County is a military community.”

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An economic boon

All told, defense contractors brought more than $6.5 million to Bay County from 2000 to 2015.

From about $25 million in 2000, the numbers have surged to as high as $842 million in 2005 before settling around $200 million for the last two years on record, 2014 and 2015.

And it’s big business throughout the Panhandle. In nearby Okaloosa County, home to Eglin Air Force Base and Hurlburt Field, over $9 billion from 10,500 contracts was awarded from 2000 to 2015.

It makes sense, said Keith Driver, president and CEO of On-Point Defense Technologies in Fort Walton Beach. Because a lot of contractors are veterans, they are already closely connected to military missions and war fighters, so they are prepared to get involved early on when gaps in capability become clear.

"You want the absolute best products and services," Driver said. "What we bring to the fight is to do just that. We want to do that at the lowest cost possible."

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The dollar amounts for contractors is even bigger in other military-heavy parts of the state. In Hillsborough County, where MacDill Air Force Base is located, over $11 billion for 19,962 contracts came in from 2000 to 2015. And in Brevard County, home to Patrick Air Force Base, over $28 billion was handed out for over 21,700 contracts.

The industry is a substantial part of the state’s economy, said Florida Defense Contractors Association Executive Director Gene Moran. Moran, a Navy veteran and independent defense lobbyist based in Bradenton, said it’s natural given the number of bases within the state.

“There are thousands of companies,” Moran said. “Some small, some medium, some large. There are elements of defense contractors and supporters that provide services, sometimes to make up for a shortage of roles. Sometimes it’s determined the contractor can do something more cost-effective.”

The money brought in by the defense industry climbs into the billions for Florida, he said. And statistics back him up. The 10 largest defense contractors in the state supplied $5.05 billion, or 40.7 percent, of the $12.4 billion value of defense procured goods and services in 2013, according to an analysis by Enterprise Florida.

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